Puget Sound Divers is a company that provides diving services such as underwater

Question

Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 200 Revenue ($470.00q) $ 94,000 Expenses: Wages and salaries ($11,700 + $128.00q) 37,300 Supplies ($3.00q) 600 Equipment rental ($2,300 + $24.00q) 7,100 Insurance ($4,000) 4,000 Miscellaneous ($540 + $1.46q) 832 Total expense 49,832 Net operating income $ 44,168 Required: During May, the company’s activity was actually 190 diving-hours. Complete the following flexible budget for that level of activity. (Round your final answer to nearest dollar amount.)

Explanation / Answer

Complete the following flexible budget for that level of activity.

Actual hours 190 Revenue (190*470) 89300 Expenses Wages and salaries (190*128+11700) 36020 Supplies (3*190) 570 Equipment rental (2300+24*190) 6860 Insurance 4000 Miscellaneous (540+1.46*190) 817 Total expense 48267 Net operating income 41033

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